Quote:Another advantage is the cost of development: Analysts estimate Boeing will spend about $4 billion to develop the new 747-8, compared with at least $14 billion for the Airbus A380. According to Merrill Lynch's Armitage, Boeing has to amortize only about $5 million of research-and-development spending per aircraft, vs. $16.5 million for Airbus. That's assuming each manufacturer sells 850 airplanes over the next 20 years. Even if Airbus ends up with a 22% higher average purchase price because of its larger number of seats, Armitage estimates R&D will represent about 10% of the A380 purchase price, vs. 3.6% for the 747-8.

Their development costs seem inordinately high to me. The 745/746 program (albiet in 1996 dollars) was expected to be around $4-5 billion.

Also, I think they paint too rosy a picture of the 747-8Is prospects at "hurting" the A380 program. Yes, Airbus could sell more A388s if the 747 program dried up and died, just because current 747 passenger operators would have to consider consolidating retired 747s into A388s, but I can't see anything more then a slightly glancing blow being delivered.

Not only this... but the 748 has to cut some fat somewhere. I think they are going to use composites and/or more lighter alloys. They also have to redesign the wing. The 748 is supposed to have some commonality with the 777/787.... this all cost money in design work.